Pawn loans

If you are looking for short-term financial assistance, pawn loans will likely be your best option. A pawn loan allows you to use an item of value as collateral for a small cash infusion that can help you cover an emergency expense or tide you over until that next paycheck comes in the mail. If your car is faulty, you need money to put gas in the tank, or you need to cover medical expenses, other forms of loans such as personal or signature loans can be too expensive or time-consuming.

Pawnshops are not banks but businesses that specialize in lending money against collateral. The loan money against jewelry and other precious metals, and the interest rates on their loans are higher than traditional banks.

Services Offered by Pawn Shops

Pawn Shops offer several services. You can use pawn loans to get cash when you need it most, utilize their buy/sell service to sell items in the shop, and even leave your valuables with them for safekeeping. These services are:

  • Pawn loans: you might need to use the shoes you’re wearing as collateral for a short-term cash infusion. When your paycheck comes in, you can repay the loan and get back your shoes.
  • Buying or Selling: If you sell an item to a pawn shop, ensure that the store provides accurate documentation stating how much money was exchanged for the item. Without documentation, it might be difficult to prove to another dealer that you sold it.
  • Purchase loans: If the pawnshop determines that your items of value, like jewelry, are not particularly rare or valuable, they might offer to buy them outright. Typically, the amount they will pay for an item is far lower than its market value.
  • Safekeeping services: Many rooms are rented out by the hour or day, but you can also use a self-storage unit for your extra belongings.
  • Loans against guns: Pawn Shops might loan money to people looking to upgrade their firearms collection, but before you sign up for a loan, make sure it’s legal to take the item across state lines.
  • Pawn Stars: Pawnshops served an integral role in the television show’s plot, but unlike what you might have seen on TV, many stores won’t make deals to buy or sell an item without recording everything on camera. If your local pawn shop doesn’t allow cameras inside their store, find another one that does.

Better Business Bureau

Before you borrow money or leave an item of value with a pawn shop, do some research to ensure the business is reputable. The Better Business Bureau rates individual businesses based on how well they maintain their work and treat their employees, how they handle customer service issues, if their advertising is misleading or false, the value of the item being pawned in relation to its original price, and whether additional services are offered.

Now you know what’s involved with pawn loans, but knowing how they work is just the beginning of your education. Many people are afraid of borrowing money because they don’t understand how interest rates and fees affect their bottom line.

Different states have different laws when it comes to pawning items for short-term loans with interest rates. Laws and regulations can also vary depending on whether the item is needed as collateral or if the loan is used to purchase something else entirely.

When the time to borrow money for an item you own comes, pawn shops are a good option. Before you sign up with a pawn shop, do research and know what makes a reputable pawn shop. What you need to know about pawn loans explains the different types of pawn loans and how they work, and what the Better Business Bureau does for consumers.